China Petroleum and Chemical Corporation (Sinopec Corp.) and Saudi Basic Industries Corporation (SABIC) today signed a Heads of Agreement (HOA) toward forming a joint venture company.
This 50:50 equal share joint venture company will invest in a 1 million metric ton per year of ethylene derivatives complex (600,000 metric tons of polyethylene and 400,000 metric tons of Ethylene Glycol) to be set up in Tianjin that will receive all its ethylene feedstock from an ethylene cracker owned by Tianjin Petrochemical Company, a branch of Sinopec Corp. The total investment will be around US$1.7 billion, with the complex scheduled to be completed by September 2009.
The Heads of Agreement was signed at a ceremony in Beijing today by SABIC Chairman, Prince Saud bin Abdullah bin Thenayan Al-Saud, and Sinopec Corp. Chairman, Su Shulin.
Prince Saud noted: “The new joint venture with Sinopec Corp. will further strengthen the links between our two companies. This will be SABIC’s first joint venture in China and we hope this will lead to more joint ventures and a strong relationship with Sinopec in the important China market.”
SABIC already has a strong relationship with Sinopec Corp. and Chinese engineers from Sinopec Corp. are currently helping to construct a world-scale polyolefins complex for SABIC affiliate Yanbu National Petrochemicals Company in Yanbu, Saudi Arabia.
“China is an important market for SABIC’s global strategy. This Heads of Agreement is a key milestone towards realizing SABIC’s goal of establishing a manufacturing centre in Asia. This facility in Tianjin will serve customers in the world’s fastest growing market, and is an important component in SABIC’s corporate strategy of being among the world’s top petrochemical companies by 2020,” said Mohamed Al-Mady, SABIC Vice Chairman and CEO.